INDUSTRY PROFILE

HISTORY AND GROWTH OF THE INDUSTRY:

The banking system is an integral part of the financial sector of our country. Therefore, the role

of banking in our economy must be seen in the context of its fundamental role in the entire

financial sector. The financial sector plays a major role in mobilization and allocation of savings.

Financial institutions, instrument and markets which constitutes the financial sector act as a

conduit for the transfer of financial resources from net savers to the net borrowers, i.e. from

those who spend less than they earn more than they spend.

The financial sector performs the basic economic function of intermediation essentially through

four transformation mechanisms.

Liability asset transformation: It means that accepting deposits as a liability and

converting them in to assets such as loans

Size transformation: i.e. providing large loans on the basis of assorted large medium and

small deposits.

Maturity transformation: i.e. offering savers deposits according to their liability

preferences while providing borrowers with loans of required maturities.

Origin of banking

The word Bank has been originally derived from the Italian word 'Banco' meaning a bench.

In olden days money lenders used to exhibit the coins of different countries on a separate bench

and the business of exchanging the coins were carried on through those money lenders, especially

in Greece, Italy and England. Whenever these moneylenders were not in a position to convert the

currency of one country into the currency of another, people virtually broke up their benches.

Hence, the word 'Bankrupt'. The word Bank has also originated from German word 'Bank',

meaning thereby a joint-stock fund, collected from public for the purpose of financing the

needy people.

Evaluation of banking in India

Banking is known in India since ancient times. It originated in our country as early as 600

B.C. References are found in the early Vedic literature of deposits, pledges, loans and rates of

interest. However, banking in those days consisted mainly of money lending activities.

Commercial banking of modern lines was started in India only during the nineteenth century.

Earlier in British India, mainly the employees at the East India Company established banks and

they were called the Agency Houses. It is these 'Agency houses' which paved the way for the

establishment of Joint Stock Bank to be established in India. The Bank of Hindustan was the

first Joint Stock Bank to be established in India under European Management. But soon it failed.

Later three Presidency Banks were started with financial position of the Government. These

Banks were the Bank of Bengal, The Bank of Bombay and the Bank of Madras. The

Commercial Bank was perhaps the first purely Indian Joint Stock Bank to be established in 1889.

Later the Punjab National Bank in 1894 and the people Bank in 1901 were established. The

Swadeshi Movement in 1905 gave a real stimulus to the development of Indian Bank. The Bank

of India was started in 1906, the Indian Bank in 1907, the Bank of Baroda in 1908 and the

Central Bank of India in 1911. However, the banking arises of 1913 hit hand many of the banks.

In 1922 the banking industry witnessed many bank failures. It is only in recent years, such bank

failures have been prevented and stability restored. In 1935, the Reserve Bank of India, which is

acting as the Central Bank of our country, was established.

Banking system in India

The Banking system plays an important role in the economic development of the country. Indian

Banking system is characterized by the present of wide variety of institutions. At the top of

the banking systems there is the Reserve Bank of India which is the Central Bank of our

country. There are 22 Public Sector Banks in India. The Banking scene is dominated by Public

Sector Banking. "Nearly the Public Sector Banking controls 25% of banking resources of the

country. Two more apex institutions in the field of agriculture and exports respectively have

also been established.

They are the NABARD (National Bank for Agriculture and Rural Development) and

EXIM Bank (Export Import Bank of India). In the sphere of Industrial Finance, we have

specialized financial Institutions such as 1FCI, IBRD, ICICI, SFC and SDC. Agriculture

finance is provided by Cooperative Banks and Regional Rural Banks.

HISTORY OF CO OPERATIVE BANKING IN INDIA.

The Beginnings

The Co-operative movements was started in India in 1904 with the object of providing finance to

agriculturists for productive purpose at low rates of interest and thereby relieving them from the

clutches of the money lenders. A large number of agricultural credit Societies were set up in

the villages under the Co-operative Societies Act of 1904. The Co-operative Societies Act of

1912 contributed to the establishment of Central Co-operative Banks and the State Co-

operative banks to provide refinance to primary credit societies which could not mobilize funds

by their own efforts. It gave stimulation to the co-operative credit movement in India.

The Co-operative credit movement made good progress during and after the First World War of

1914-1918. But during the great depression of 1929-1933 it received a serious setback with

the outbreak of Second World War between 1939-1945. The Co-operative Credit movement

made considerable progress once again.

By that time, the Co-operative Credit institutions had increased their membership had

gone up and their deposits and advances also had increased considerably. Since then the

progress had been maintained thanks to the keen interest shown by the Reserve Bank of

India in the co-operative Credit movement.

MEANING OF CO-OPERATIVE BANKING

A CO-OPERATIVE BANK is a co-operative organization engaged in the banking

functions of acceptance of deposits and lending credits.

The Co-operative banks and Societies perform an important role in meeting the

requirements of people in the rural areas Co-operative banks and district entities by

themselves with separate jurisdictions and independent board of directors. The Co-operative

banks are organized on a Cooperative basis and one governed by their members according

to the Co-operative laws. They are under the control of respective State government certain

provisions of the banking regulation act also applied to co-operative banks in India are

federal in their structure

AIMS OF CO-OPERATIVE BANKS

• To promote savings among members and thereby increase the supply of funds.

• To tap outside sources for the supply of funds.

• To promote the effective use of credit and to reduce the risk in the granting of credit.

• To reduce the cost of management through the honorary services.

MERITS OF CO-OPERATIVE BANKING:

Co-operative banks play a very significant role in rural banking. The significant role of

cooperative banks is owing to the following reasons

• Co-operative banks have a rural touch

• They are familiar with the rural problems

• They have attitudinal! identification with rural economy

• The cost of operation of co-operative banks is relatively low

Co-operative Banking has thought the agriculturist to borrow at the right time in right

amount and for right purposes. Co-operative banking is widely accepted as the only

means of eradicating poverty and realizing the standard of living of rural masses

Recent Developments

Over the years, primary (urban) cooperative banks have registered a significant growth in

number, size and volume of business handled. As on 31st March, 2009 there were 1,721

UCBs of which 53 were scheduled banks. About 64.8percent of these are located in three states

- Gujarat, Karnataka, and Maharashtra (including Goa). Recently the problems faced by a

few large UCBs have highlighted some of the difficulties these banks face and policy

endeavors are geared to consolidating and strengthening this sector and improving governance .

Co-operative banking in India

Co-operative banking in India has made substantial progress in dissemination of banking

services based on co- operative principles. In view of the special thrust on financial inclusion,

co-operative banking has acquired renewed significance in the Indian financial system. The

focus of the recent policy measures, therefore, has once again shifted to the strengthening of co-

operative banking in India. The review of the problems of rural cooperatives by the Task Force

(2004) constituted by the Government of India and the Vision Document on urban co-operative

banks (UCBs) released in March 2005 by the Reserve Bank, have provided a fresh framework

with practical and implement able arrangements to rejuvenate the Indian co-operative banking

structure. The emphasis of the recent initiatives has been to revitalize these institutions for

reinstating the confidence of the public in the co-operative banking system. While designing the

regulatory and supervisory framework, care is being taken to preserve their co-operative

character and institutional specifics.

The co-operative banking structure in India comprises two main components, viz., urban co-

operative banks and rural co-operative credit institutions. While urban co-operative banks

have a single tier structure, rural cooperatives have a complex structure. Rural cooperative credit

institutions have two distinct structures, viz., the short-term co-operative credit structure

(STCCS) and the long-term cooperative credit structure (LTCCS). Within the STCCS, primary

Agricultural credit societies (PACS) at the village level form the base level, while district

central Co-operative banks (DCCBs) are placed at the intermediate level, and the State co-

operative banks (STCBs) at the apex level. The STCCS mostly provide crop and other

working capital loans primarily for a short period to farmers and rural artisans. The long-term

structure of rural co-operatives comprises State co-operative agriculture and rural development

banks (SCARDBs) at the State level, and primary co-operative agriculture and rural development

banks (PCARDBs) at the decentralized district or block level. These institutions focus on

providing typically medium to long-term loans for making investments in agriculture, rural

industries, and lately housing. The structure of rural co-operative banks is not uniform across the

States of the country, and varies significantly from one State to another. Some States have a

unitary structure with the State level banks operating through their own branches, while others

have a mixed structure incorporating both unitary and federal systems.

Given the significant role played by urban co-operative banks in providing banking services

to the middle and lower income people, the Reserve Bank continued to take initiatives to

strengthen these banks. In June 2004, it was decided not to issue fresh licenses for setting up new

banks or for opening new branches, until a suitable framework for regulation and supervision

was put in place for the existing UCBs. In March 2005, the Reserve Bank prepared a draft Vision

document for UCBs which, inter alia, discussed the problems of the sector and highlighted the

issue of dual regulatory mechanism which restricted the ability of the Reserve Bank in handling

the weaknesses of entities in the sector. In order to address the problem of dual control, Vision

document proposed the adoption of a consultative approach for deciding the future set up of

weak and sick banks in each State. In terms of the Vision document, the Reserve Bank

approached the State Governments for signing MOU to ensure greater convergence of approach

of the two agencies entrusted with the regulation and supervision of UCBs. As part of the MOU,

it was decided to set up State level Task Force for Co-operative Urban Banks (TAFCUBs)

comprising representatives of the Reserve Bank. State Government and federation/association of

UCBs. The TAFCUB was entrusted to identify the potentially viable and non viable UCBs in the

State and provide a revival path for the former and anon-disruptive exit route for the latter set of

banks. The exit route could include merger/amalgamation with stronger banks, conversion into

societies or ultimately as a last resort, through liquidation. Till 2009, MOUs have been signed

with 26 State Governments and Central Government (in respect of multi-State UCBs),

which encompass 1,721 UCBs, i.e., 99 per cent of the UCBs representing 99.2 per cent of

deposits of the sector. The impact of the initiatives in the recent past is perceptible as there

is enhancement of public confidence in the sector which is reflected in the increase of

deposits during 2006-07 and 2005-06, reversing the declining trend of 2004-05.

TYPES OF CO-OPERATIVE BANKS

Structure of Co-operative Credit Institutions in India

Co-operative Credit Institutions

Urban Co-operatives Banks

Rural Co-operative Credit Institutions

Scheduled UCB’s Non-Scheduled UCB’s Short-Term

Multi State

Single State

Multi State Single State

Single District Multi District

State Co-operative Banks

Primary Agricultural Credit Societies

District Central Co-operative

PCARDB’s SCARDB’s

Long-Term

SCARDB’s: State Co-operative Agriculture and Rural Development Banks.

PCARDB’s: Primary Co-operative Agriculture and Rural development Banks.

The following are the steps taken by the Government of India to regulate Banking Institutions in

the country:

1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.

1960: Nationalization of SBI Subsidiaries

1961: Insurance cover extended to deposits.

1969: Nationalization of 14 major banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalization of seven banks with deposits over 200crores.

In third new phase of Indian banking with the advent of financial and banking sector reforms,

introduced many more products and facilities in the banking sector. In 1991. Under the

chairmanship of M.Narasimham, a committee was set up by his name which worked for

liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a

satisfactory to customers.

COMPANY PROFILE

Co-operative sector has a long history of more than a century. In the co-operative movement,

Agriculture Credit sector has acquired a special importance in order to avoid the exploitation of

poor farmers from the middlemen and money lenders and to provide suitable assistance to the

eligible farmers. As our Nation is basically an agricultural country, Agricultural credit system

plays an important role in the development of this sector. Through this system, the credit sector

is extending helping hand to the farmers in its own way to boost the agricultural production in

the State in particular and in the Country at large.

KSC Apex Bank over the ninety six years, since its inception has always come forward to

extend its assuring hand to the state through District Central co-operative Banks, Primary

Agricultural co-operative Credit system. Besides the Bank is providing the needed financial

assistance, for development of Human Resources, Training, Computerisation and all other

encouragement from time to time to the DCC Banks and PACS.

BACKGROUND AND INCEPTION OF THE COMPANY

The Karnataka state co-operative Apex Bank limited has been playing a very significant role in

the dispensation of production, credit to the farmers. It is to the credit of Karnataka, that the first

co-operative credit institution in the entire country was established way back in the year 1904 in

a village called Kanginahal now at Gadag district. Primary Agriculture Credit Society (PACS) at

the village level federated later to District Central Co-operative Banks (DCCBs) at the district

level. These DCC banks federated themselves at the state level to form Apex Bank.

The Karnataka State Co-operative Bank was established in the year 1915 and the late

VaradarajaIyengar has been its founder president. It made a humble beginning with a working

capital of Rs 1.26 lakhs as deposits. Over 96 years since its inception, it has played a crucial role

in the development of agricultural credit structure in Karnataka. The bank is having a network of

40 Branches in Bangalore City. As on 31.03.2011 working capital stands at Rs.7291.48crores

with a Deposit base of Rs.4646.67crores.The bank earned 35.50 Crores.

Apex bank is a pioneer in agriculture finance and activities. Apex bank is ranked as one of

the premier state co-operative banks in the country. The main objectives of the bank are to serve

the farmers in the state by providing short term and long agricultural loans, general banking

business and function as a leader of the co-operative banks in the state.

NATURE OF BUSINESS

The business carried by the bank is generally related with providing short term and long

term agricultural loans. It also accepts deposits from the public. Apex bank also provides loans to

processing, marketing and consumer co-operative as well as sugar factories in Karnataka and

working capital loans to state and national level institutions.

VISSION:

As a state co-operative bank, Apex bank shall be a dominant financial institution

in the state, leading the state to economic prosperity.

They shall be the model of an effective, protective, dynamic and financial sound

organization, respectively to state goals and aspirations.

They shall maintain highly trained and motivated professionals committed to the

highest standards of ethics and excellence.

They shall contribute to building progressive and standards of cooperative

societies in the service of farmers and rural mass.

MISSON:

Ensuring the best quality of life and success of farmers, primary agricultural Co-operative

Societies, District Central Co-operative Banks, clients and employees.

For Farmers:

Apex Bank shall continue to improve their socio-economic status through timely financial

agricultural activities support for agricultural activities.

For Clients:

Apex Bank shall deliver innovative and advance products and services in protective and

effective manner to meet their local demands.

For PACS and DCC Banks:

Apex banks shall ensure mutual co-operation and complement action to achieve optimum gains

in an environment of trust and confidence.

For Our Employees:

Apex Bank shall ensure a work atmosphere of mutual respect and teamwork within by a system

of recognition and regards. Banks shall continue to provide appropriate training and value

enhancement to ensure the highest degree of professionalism and integrity. Apex Bank shall hold

our organization composed of highly competent people driven by superior technology.

For the People of Karnataka: Apex Bank commits our unwavering loyalty and

dedicated service in the pursuit of state interest.

QUALITY OBJECTIVE:

To serve as a state co-operative bank and as a balancing centre in the state of Karnataka

for registered co-operative societies.

To raise funds by way of deposits, loans, grants donations, subscription, subsidies etc.

for financing the members by way of loans, cash credits, overdrafts and advances.

To develop, assist and coordinate the members DCCBs and other co-operative societies

and secure financial assistance for them.

To arrange/ hold periodical co-operative conferences of the DCCBs and other members

of the bank and to take action for the growth and development of the co-operative credit

movement.

Financing of short-term loans to seasonal agricultural operation and marketing of crops

repayable within one year.

Advancing Cash credit loans to meet working capital for processing. Marketing and

consumer co-operative including co-operative Sugar Factories in Karnataka.

Advancing medium term loans for development of agricultural infrastructure such as

irrigation, diary poultry, plantation, and gober gas under schematic lending.

Sanctioning working capitals to the State Level Co-operative, National level Co-

operatives and public sector undertakings through consortium arrangements.

Sanctioning advances to the non-form sector to develop cottage Industries, small-scale

industries and rural artisans.

Functioning as a scheduled bank, transacting all types of banking business such as

remittances of funds, by demand drafts, issue of credit and guarantees.

Rendering services to customers through computerized accounts. Supporting the

primary agricultural credit societies under the business development programme and

District central co=operative Banks under the development plan.

Providing loan facilities like consumers durable loan, computer loan, jewel loan and safe

deposit locker facilities to the customers of the bank.

OBJECTIVES OF THE KSC APEX BANK LTD.

The main aims and objectives of the Bank defined in the Bank Bye Law No. III are given below

. To serve as a State Co-operative Bank and as a balancing center in the State of Karnataka

for registered co-operative societies;

To raise funds by way of deposits, loans, grants, donations, subscriptions, subsidies etc. for financing the members by way of loans, cash credits, over-drafts and advances;

To develop, assist and co-ordinate the member DCCBs and other Co-operative Societies and secure financial assistance for them;

To arrange/hold periodical Co-operative Conferences of the DCCBs and other members of the bank and to take action for the growth & development of the Co-operative Credit Movement.

To participate in financing Co-operative and other institutions who are members of the bank, directly or through consortium of Bankers;

To participate in the schematic lending and to provide loans for which refinance facility is available with term lending institutions.

To arrange for the inspection and supervision of the affiliated DCCBs and other Co-operative Societies and guide them in their working;

To buy and sell securities for the legitimate investment of surplus funds and act as agents for buyers and sellers of securities of Central/State;

To carry on general business of Banking and other banking activities to the members and customers;

To purchase, acquire or raise or otherwise obtain moveable or immoveable property for the own use of the Bank and also to dispose them of when not required;

To take measures to help Co-operative Education;

To promote and undertake Co-operative Research and Co-operative Development;

To manage, sell or release any property which may come into the possession of the bank in satisfaction of or part satisfaction of any of its claims;

To promote economic interest of the members of the Bank in accordance with the principles of Cooperation.

To do such other things as are incidental or conducive to the promotion and advancement of the business of the Bank;

PRODUCT/ SERVICES PROFILE:

The Karnataka state co-operative Apex Bank Limited provides following services to the

societies:

Financing of Short Term Loans for Seasonal Agricultural Operations and for Marketing of Crops. These loans are repayable within one year.

During the year 2010-11, Apex Bank has disbursed total loans of Rs.4033.32 Crores of which Rs. 2707.91 Crores for Agricultural Purposes and Rs. 1325.41 Crores for Non-Agricultural Purposes.

Advancing Medium Term Loans for the development of agricultural infrastructure such as Lift Irrigation, Dairy, Poultry, Plantations, Gobar Gas, etc., under schematic lending.

Providing Cash Credit Loans to Processing, Marketing and Consumer Co-operative as well as Sugar Factories in Karnataka and also Term Loans to sugar factories under consortium arrangements.

Advancing Working Capital loans to State level Co-operatives like MARKFED, KCCF and to the National Level Co-operatives such as IFFCO and KRIBHCO. The Bank provides similar facilities to Public Sector Undertakings like Food Corporation of India through consortium arrangements with Commercial Banks and at times directly.

The Bank extends finance to Non-farm Sector and for the development of cottage Industries, Small Scale Industries and Rural Artisans and Weavers. It is a Scheduled Bank in all respects including remittances of funds by Demand Draft, Mail Transfers, Collection of Cheques and Drafts

SERVICES PROVIDED BY THE BANK IN DETAIL:

Short term loans:

Financing of short term loans for seasonal agricultural operations and for marketing of

crops, these loans are repayable within one year.

Medium term loans:

These loans area sanctioned for agricultural purpose and non-agricultural purpose.

Kissan credit card schemes/loan:

Kissan credit card aims at providing timely and adequate credit support to farmers for their

cultivation including investment credit needs in a flexible and cost effective manner. All DCC

banks in the state have implemented the kissan credit scheme.

Credit facilities to self help groups:

All the DCCBs have taken keen interest in the formation of self help groups in co-

ordination with PACS. Self help groups mobilize their savings and avail facilities from DCCBs

and PACS.

Advancing medium term loans with economic development:

These loans are advanced for the agricultural infrastructures such as lift irrigation, diary,

poultry, plantation; Gobar gas etc. that constitutes schematic lending.

Cash credit loans:

Providing cash credit loans to processing marketing and consumer co-operatives as well as

sugar factories in Karnataka and also term loans to sugar factories under consortium agreement.

Working capital loans:

Advancing working capital loans to state level co-operatives like CAMPCO, MARKFRED,

and KCCF and to the national level co-operatives like IFFFCO and KRIBHCO. The bank

provide similar facilities to public sector undertakings like Karnataka Silk Marketing Board,

Karnataka Handloom Development Corporation, Karnataka Small Scale Industries Development

Corporations, Food Corporations of India directly and also through consortium arrangements

through commercial banks.

Collection of Cheques and Drafts:

The bank extends to the non-farm sector and to the development of cottage industries, small

scale industries and rural artisan wavers. It is a scheduled bank in all aspects including

remittance of funds, demand drafts, mail transfers, collection of cheques and drafts.

Loans through various schemes:

Such as:

Housing loans for Construction, Site Mortgage loans, Professional loan, Vehicle loans,

Housing loans, Commercial Vehicle loan , Instalment loans, Jewel loans, Instalment loans,

Apex Personal, Apex cash, Apex Education, Apex Travel, Apex Rent, Apex BDA, Apex

Bank , Apex Overdraft, Apex Retail, Apex Women, Apex Self Employment, Apex Gold,

Apex Pension, Other loans.

Personal Banking:

Apex bank provides the following deposit schemes to the customers:

Fixed Deposits:

In this account, the customer deposits money period up to 10 years.

Current Deposits:

In this type, the individuals or businessmen operate. This account is kept open for the entire day.

The customer can make any number of deposits and withdrawals in a day during business hours.

Saving Bank Deposits:

In this deposit, the low income class groups and marginal customer deposits the money.

Insurance Scheme in collaboration with Oriental Insurance Company:

• Apex Gold SB Account

• Fire/Earthquake Insurance

• Vehicle Insurance

E-Stamping Facility:

Bank has introduced E-Stamping facility through our Branches.

• The Apex Bank conducts Training Programmes through its own institution viz.,

Agricultural Co-operative Staff Training Institute at Padmanabhanagar to cater to its own

staff as well as the employee of DCC Banks and Primary Agricultural Co-operative

Societies.

• The Bank has set up some special funds like the Farmers’ welfare Fund, Special

Assistance Fund, Rural Farmers’ Social-Economic Development fund, Co-operative

Development Fund etc. for extending assistance to member Banks and to the Primary

Agricultural Credit Co-operative Societies.

• Computerization of Branches :The Banking transactions in all the Branches and

Central Office have been computerized under TBA(Total Branch Automation) module

and also in the process of bringing under Tele Banking, Mobile/SMS Banking, Any

Branch Banking, Internet banking. We are planning to switch over to CBS(Core Banking

Systems)shortly.

• Safe Deposit Locker facility is available in our branches.

AREA OF OPERATION:

Apex bank works in the regional level only. It does not work in national level. The area of

operation covers the entire Bangalore. It has 40 branches in Bangalore and head quarter is

situated in Chamarajpet. The branch offices of bank are adequately delegated with power of

sanction of disbursements. If the loans are to be provided up to 10 lakhs it is handled by

concerned branch offices but if it is more than 10 lakhs then it is handled by concerned branch

offices but if it is more than 10 lakhs then it is handled by main branch.

BRANCHES AT BANGALORE:

Head office Branch - Chamarajpet.

Ashoka pillar. Jayanagar Market

complex

Ganganagra M.S Building

Banashankari Jayanagar 9th Clock Padmanabhanagar Mahalakshipuram

Basaveshwaranagar J.P.nagar Public Utility

Building

Vyalikaval

Girinagar Kalpathru super Bazaar Rajajinagar Chandra Layout

Gokula Koramangala R.P.C Layout Vivekanada College

Gandhinagar Kengeri Satellite Town Vijayanagar R.T Nagar

Agara-HSR Layout Lakkasandra VidhanaSoudha Shivajinagar

Indiranagar Magadi Road Legislators’

Home

R.T.Nagar

Sunkadakatte Krishnarajpuram Yelhanka Bommasandra

T.Dasarahalli B.T.M layout Rajarajeshwari

Nagar

Mahadeva Pura

Banashankari 3rd

Stage

OWNERSHIP PATTERN:

The bank classifies its shareholders into 6 types such as A, B, C, D, E and F class. The face value

of shares under each class is different from others. A class shares are alone having the Voting

Rights. B, C, and D classification have an option to participate in Company Meeting. E category

shares are the shares held by the members other than A, B and D classification. F classification is

very general type since it doesn’t have Voting Rights and participation in Company Meetings,

but the face value of shares in this category is less compared to others.

SHARE CAPITAL

Classification summary as on 31-03-2011

Classification No. of Face value Shares

Sl.N

O

Type members of shares Amount

1 A – DCC Banks 21 23,66,436 79,28,00,000

2 B – KSUBF 1 1,50,000 1,50,000

3 C – State Government 0 1,00,000 0

4 D – State & national level co-

operative institutions other than B

40 67,934 67,07,100

5 E – Co-operative institutions other

than A, B, D

11 16,207 16,20,600

6 F – Associate/Nominal members 44 9,246 11,12,90,000

Total 117 24,55.799 91,25,67,700

For sanctioning of loan from the bank, each member has to keep some fixed percentage

of loan amount in the shares of the Bank. For Cash Credit 1%, for Agriculture Loan 2.5%, for

Non-Agriculture Loan 5% has to be kept in shares of the Bank.

COMPETITORS INFORMATION:

The major competitors are:

Land Bank (agricultural based finance), Amanath Scheduled Co-operative Bank,

Sham RoaVittal Co-operative Bank, Commercial Banks, Small Industrial Service

Institution, Small Industries Development Bank of India, Corporate Banks, Some

local Co-operative Banks.

INFRASTRUCTURAL FACILITIES:

The new administrative building at a around Rs.800 lakhs completed in 2002 provides

additional impetus to a new culture and new mind set of all. The gigantic building with granite

caddied facade having circular and rectangular columns suggesting strengths and stability

reflects the character of the organization.

This four storied block caters mainly to the administrative requirements of the bank along with

hi-tech banking hall on the ground floor. The architects M/s Zechariah consultants effectively

conceptualize the vision of the corporate head office floated by the Directors of the Board.

The built up area of “UTHUNGA” HAS BEEN 67,820 Sq. ft. the civil cost has come to Rd. 888

per sq. Ft. And interiors all inclusive worked out at Rs.357 per sq. Ft. The believe that their

members are always behind them not only to encourage but also to guide them in case they go

wrong. They are grateful to them. Similarly they are grateful to the Government of Karnataka,

RBI, NABARD and all other sister co-operative in the state for what they are today.

ACHIEVEMENT/ AWARDS:

1) Bank is able to lend 75% of the farmers in the state and it covers all sugar

factories in Karnataka.

2) Apex Bank is habituated to get awards at National levels year after year.

Similarly. NABARD has been giving best performance award and even PACS

have not have logged behind in getting National recognition. All DCC banks and

merely 80% of PACS have proved themselves to be financially viable.

3) In the history of Apex Bank 9 new branches have been opened at a time in

different localities of Bangalore City i.e., BSK 3rd stage, Sunkadakatte, K.R.

Puram, Mahadeva pura , Bommasandra, BTM layout , Rajarajeshwarinagar,

Yalahanka and T.Dasarahalli.

4) A Micro Finance department has been established in the bank for proper

monitoring of micro finance scheme to SHGs.

5) A loan of Rs. 110-00 Crores has been issued to weaves & fishermen under

government loan scheme of 3% interest.

6) E-stamping facility has been implemented in our branches.

7) RTGS and NEFT System has been implemented for speedy transfer of funds and

upgraded as per RBI instructions.

8) They have entered in to an agreement with Oriental Insurance Company Ltd.,

and introducing various insurance products in our Bank and also arranged group

insurance scheme for the Savings Bank account holders.

WORK FLOW MODEL (End to End)

Filing the loan application

Processing the loan application

Seeking eligibility criteria

Accepting as a customer (need sure from existing customer)

Work flow in KSC Apex Bank Ltd. Through different Departments:

1) Central financing agency

2) Accounts and Operation

3) Planning and development

4) Banking

5) Administration

6) Development Action Plan

7) Statistics

Collecting of required loan fees

Opening of account

Forwarding application to the branch manager

Sanctioning loan by the branch manager

Recovery of interest plus principle

If borrower fails to pay Interest with principle Every month (up to 3 months) Then bank will treat as NPA

8) Branch Control

9) Inspection and audit

FUTURE GROWTH AND PROSPECTS

1. It is proposed to implement ATM facility initially at Head Office Branch, Vidhana

Soudha Branch, Legislators Home Branch, M.S. Building Branch, and

Basaveshwaranagar Branch.

2. It is proposed to convert the existing TBA module in to core banking solution system in

all branches and Head office of Bank.

3. We have intended to open our branches in all district head quarters in the state. In the 1 st

phase it is proposed to open 4 branches in 4 divisional head quarters.

4. We have proposed to construct the branch buildings in the Bangalore city on our own 6

sites.

5. It is proposed to implement uniform dress code to our staff members

6. We have intended to recruit middle level officers posts through direct recruitment in

order to bring professionalism in our bank.

Special activities of the Bank

The bank has expanded its activities and offers all types of services to its customers

growth in deposits as well as loans and advances has led to appreciable rise in

profitability from year to year. It has now built up a strong capital base and is ranked as

one of the premier state Co-operative bank in the country.

The bank offers prompt customer service.

Nearly 40% of loans have gone to weaker sections/SC/ST and agricultural labours

The Apex Bank is one of the 1st state Co-operative banks which have introduced

computerization.

The Apex bank runs its training programmes in its own institutions named the

Agricultural Co-operative Staff Training Institute (ACSTI) at padmanabhanagar to cater

its own staff as well as the employees of DCC banks and primary agricultural Co-

operative societies.

The red one are hard S’s

MCKINSEYS’S 7S FRAME WORK

ORGANIZATION STRUCTURE

BOARD OF MANAGEMENTPresident (1)

Vice president (1)Directors (20)

Managing Director (IAS)

The purple one are soft S’s

BOARD OF DIRECTORS

Sri R.M Manjunantha Gowda, president and there are 25 Board of Directors including president.

ORGANIZATIONAL STRU CTURE :

CGM(A&D)

Secretary (JRCS)

CGM(F&A)

GM (ACSTI)GM (P&D) GM (I&A) GM (Banking)

Manager

Faculties

Clerk/steno,Attenders

DGM (P&D) DGM (DAP)

AGM (Sr.KT) Managers

Managers

AsstManagers

AsstManagers

Clerk/Steno

Clerk/Steno Attenders

DGM (I&A)

AGM (I&A)

Managers

AsstManagers

DGM (A&O) DGM (Funds) DGM (CFA)

Clerk/Steno

Attenders

AGM (A&O)

DGM (BC)

Managers

AsstManagers

Clerk, steno,Attenders

Managers

AsstManagers

AsstManagers

AsstManagers

AGM (A&O)

Managers

Clerk, steno,Attenders

Managers

Clerk, steno,Attenders

Clerk, steno,Attenders

1. Human Resources section

2. Head office section

3. Planning and development section

4. Accounts and Operation

5. Central Financing agency

6. Clearing section

7. Inspection and Auditing

8. Crediting Department

9. Working capital Financing

1. HUMAN RESOURCE SECTION

This section is a part of planning and development department. This section providing

Loans to staff Members, like Housing loans, Vehicle loans, Consumer Durable loans, Secured

loans against Government securities, Festival advances,

2. HEAD OFFICE SECTION

This section deals directly with the customer. It has various types of deposits and loan

schemes.

Deposits

Interest on deposits

Saving bank 4.00% P.A

TERM DEPOSIT RATE OF INTEREST FOR DEPOSITS EFFECT FROM 24/05/2011

 SL.NO  PERIOD OF DEPOSITS  Rate of Interest1  15 Days to 45 Days  5.00% 2  46 Days to 90 Days  5.75%

 3  91 Days to 179 Days  8.00% 4  180 Days to Less than one Year  8.50% 5  1 Year, Above & Less than 2 Years  9.75% 6  2 Years and Above  9.50%

Additional 1% interest is paid for staff and ex-staff accounts.  0.50% more interest is paid for Senior Citizen. Additional 0.50% interest is paid for Individual deposits of Rs. 15.00 Lakhs & above,

invested at a time for a period of one year & above.

3. PLANNING AND DEVELOPMENT SECTION

Under this department there are five sections and they are

a. Engineering

b. Development Action Plans

c. Administration

d. Statistics

e. Legal cell

4. ACCOUNTS AND OPERATION SECTION

The primary activity of this section is to sanction to the customers who have applied for it

and it deals with investing the surplus funds of the bank.

The main activities are.

Giving advances to the district central co-operatives banks (DCC)

Borrowing from NABARD

Investments: the surplus funds of the bank can be invested in various ways.

5. CENTRAL FINANCING AGENCY

The main functions of this department are to provide housing loans, short term seasonal

agricultural operations, medium term loans, cash credit.

6. CLEARING SECTION

Karnataka State Co-operative Apex Bank limited has 40 branches of its own and 65 sub-

members. The clearing section will clear the cheques by either payment or by receiving

money.

STAFF :

CADRE SANCTIONED WORKING VACANCYCGM 2 2 1GM 4 0 4DGM 12 6 6CHIEF STATCIAN 1 0 1AGM 18 18 0SR.KAN.TRNSLTR(AGM) 1 1 0MANAGER 75 74 1ASST.MANAGER 114 95 19JR.KAN.TRNSLTR(CLERK) 1 0 1CLERKS/CASHEIR 204 135 69ST.WRITERS 11 4 7ATTENDERS 126 89 37FIREMEN 1 1 0TOTAL 570 425 146

Duties:-

CLASS A OFFICERS:

They are there to guide the fellow officers. These officers are the head of the departments.

The Managing Directors, Executive Directors are at highest level.

CLASS B OFFICERS:

The class B officers are there for performing various functions of the organization. The officers

look after the functions like treasury functions, legal functions and internal audit etc..

CLASS C- other subordinate staff:

These officers are responsible to implement the function which is given by the bosses. The lower

level officers have to perform the commanded task of their department.

The bank has a unique combination of its professional on its payrolls charted accountants,

M.com, lawyers, Engineers, and graduates etc. Thus the diversity of its Human Resources is one

of the important assets of the bank.

Bank follows a typical selection procedure. As a first step, advertisement is given as and when it

is required. The test is conducted and the candidate made to go through interview which is being

conducted by the top management board. It consists of subject expert from different department.

Bank provides on the job and off the job training as per requirements.

STYLE:

Bank follows a top down participative style of management. It believes in team work. For each

task teams are constituted to attain specific goals. Apex band believes that quality can be

achieved by providing quality financial and related services on a continuous basis. In order to

motivate the employees, it encourages them to actively participate in setting organization growth

targets, objectives and to take their own decisions at various levels. By this type of participative

style the bank can conflict their rivals like land bank, Amanath Scheduled Co-operative Bank,

SYSTEM:

The bank has a specified department for its MIS. This department is solely responsible for

providing update information of all branches, all departments etc required by the management

time to time on continuous basis as and when required.

MIS Department

In the first floor of the apex bank head office. MIS department is located. This department helps

in the flow of information by the means of various software networking techniques.

Performance Appraisal

This is also known as order executive. In this system employees can watch over their

performance level and required level during the process of transfer, promotion, demotion, this

system has helped better performance of work.

Attendance system

This system is very popular system for the purpose of maintaining attendance. Everyone is using

this technique for the attendance of their employees. This system is called swapping system. In

this system the employees have their own ID card and during their entrance to the bank they

swipe their card and mark their attendance. This system saves time and money.

STRATEGY:

Apex bank in one of the pioneers in this industry in providing short term loans and long terms

loans to farmers and medium scale industries. As a part of its marketing studies it makes its

advertising through newspapers, leading television channels and focus over quality certificate.

The following are the strategies used by Apex Bank to compete with its rivals.

Business Developments

This is a strategy in which existing customers are attracted. This strategy follows the

entrepreneur recognitions like that of penny sectors, and then attracting with various schemes.

Identify needs

This is also one strategy of Apex Bank which is used to identify the actual needs of the market.

This will help the band to cover the demands of the markets by coming with various schemes

and this organization has succeeded in knowing the consumer demands.

SKILLS:

The banks require different skills for different types works at different levels. Highly qualified

professionals in the bank have major skills like technical, finance, economical and public relation

skill. The bank also looks for the development of their staff skills. The various programs

organized by Apex for this purpose could be classified into in house and outside.

On the job training

The bank has the internal job training by means of guidance by their senior staffs. The bank also

provides the on job training like:

1. Group assignment over some project

2. Job rotation

3. Under supervision works

Off the job training

1. In house training: this job training is done at ACSTI, padmanabha Nagar with residual

facilities.

2. There are various programs performed as off the job training in Bangalore.

The training provided is classified as

1. Communication skill training.

2. Computer skills

3. Project skills

4. Secretarial skills

SHARED VALUES:

A shared value is satisfying the farmers and small and medium scale industries first. Mission the

Apex bank is committed to continuously nurture, develop and service the small sector thought

the need based products and services. The value that the bank upholds most is “Farmers

Satisfaction”. This bank focuses over their farmers and industrial demands and wants. They

also come up with various schemes like housing loans, vehicle loans.

SWOT ANALYSIS

SWOT is the acronym for strength. Weakness, opportunities and threats. Strengths are the

internal. Positive characteristics that the company processes. One look at this competitive

advantage. Weaknesses are internal as well and are the negative aspects of the company and

indicate competitive vulnerabilities. These should be distinguished from problems such that

immediate collapse is not likely. Weakness should be overcome in order to achieve future

growth and success. Opportunities are external and provide areas of growth and improvement of

the company. Threats are external to the company and action is required

SOWT ANALYSIS

INTERNAL SOURCE EXTERNAL SOURCE

STRENGTHS:

Rural development and priority

Has the support of government in its functioning

It is an open, proactive, team based and learning organization

Experience in the field of banking for about 9 decades

Profits, advances, reserves of title bank are increasing.

Repayment period is very flexible

Wide range of schemes

One of the co-operatives banks in India

Due to co operative in nature people have faith in bank.

Have well equipped, modernized and growth oriented staff training institute (ACSTI) for the staff working co-operative sector.

Have good network base of DCC Bank and PACS in Karnataka as compared to other

state.

WEAKNESS:

Government culture in the organization

“Functions as per Act”

It operates only in the regional level only

Lack of advertising

Procedural difficulties regional operation

Too many policies bound.

No permission to have NRIs accounts, mutual funds, foreign exchange.

slow pace of technology application

Lack of scientific and professionalized management.

STRENGTH WEAKNESSWEAKNESS

THREATSOPPURTUNITYOPPURTUNITY

OPPORTUNITIES:

Introduce internet and mobile banking

Mutual funds

Insurance

Advising on the investment

Raising of capital from all sources.

Introduce innovative services through its R&D programmes.

THREATS

Fail to provide updated facility to their customers

Too many competitors

There are too many commercial banks, Which provides funds at lower internet rates,

which can be big threats for apex bank

Government policies.